Implications of Electronic Mail and Message Systems for the U.S. Postal Service

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8 .Implications of Electronic Mail and Message Systems for the U.S. Postal Service

about 21 percent and the number of rural delivery points increased by about 50 percent.Even assuming that the 3 percent annual average during the 1970's is an accurate measure,this does not appear to be a realistic expectation for the 1980's in view of the fact that mostproductivity improvement from automationand mechanization has already been realized.Even the expanded ZIP code program, knownas ZIP + 4, would realize a total labor productivity improvement of only 2.3 percent, according to USPS estimates.Taking these variables together, and assuming high but plausible EMS growth, OTA concluded that the USFS labor force requirementin 2000 is most likely to be roughly 20 to 25percent below the 1980 level. This result is projected for the base case of 1.5 percent annuallabor productivity improvement and 2 percentannual underlying mainstream growth, andalso for the cases of 3 percent productivity improvement/3 percent mailstream growth, andO-percent productivity improvement/1- percentmainstream growth. Under all three of thesescenarios, the need for significant labor forcereductions is not likely to be felt until the late1980's and early 1990's, but would increasequite rapidly thereafter.Whatever the level of reductions, they arenot likely to be spread evenly among all em

ployee groups. The post office clerks and mailhandlers group would be expected to be hit thehardest, losing perhaps two fifths of their 1980complement by 2000. Post office supervisorsand city delivery carriers could, by 2000, bereduced by about one fifth and rural deliverycarriers by about one tenth of their 1980 com-plements.Whether or not these labor force reductionscould be handled through attrition dependslargely on future USPS retirement, quitting,and new hire rates. But the uneven impact ofreductions on various employee groups makesthis unlikely. In addition, the uneven distribution of minority employment among employeegroups raises the possibility that such reductions may fall disproportionately on black andperhaps other minority employment. For example, as of late 1978, the mail handlers,whose employment would be reduced themost, had one of the highest percentages ofblack employment. Involuntary labor force reductions in this area, if needed, would likelyraise some difficult social and political issues.Overall, the impact of labor force reductionson promotion opportunities, upward mobility,employee morale, and union contract negotiations could be significant. These areas warrantfurther study.

Policy Implications

The OTA analysis indicates that, regardlessof what role USPS plays in Generation II electronic mail, reductions in USPS delivered mailvolume due to diversion to Generation IIIEMS and EFT could reach significant levelsby 2000. The threat to USPS delivered mailcould come even sooner if Generation III EMSservices (all electronic) develop faster than currently anticipated, if the underlying growthin the mainstream is less than the historicalaverage, or if diversion of second and thirdclass mail to alternative (nonelectronic) delivery services increases significantly beyond current levels.

Although a USPS role in Generation IIEMS has the potential to provide a volumeand revenue "cushion" to partially offset reductions in conventional mail volume and revenue, there is little consensus among USPSand major stakeholders on exactly what theUSPS role should be in the provision of Generation II EMS.The market penetration results indicate thatUSPS delivered mail volume (conventionalmail plus Generation II EMS hardcopy output) is one key factor in considering a USPSrole in Generation II EMS. USPS deliveredvolume is a function in part of the rate of